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What Drives Financing Decisions of SMEs? A Survey of German Bank Advisers

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Goeck, M., Walther, U. What Drives Financing Decisions of SMEs? A Survey of German Bank Advisers. Credit and Capital Markets – Kredit und Kapital, 55(1), 67-97. https://doi.org/10.3790/ccm.55.1.67
Goeck, Marco and Walther, Ursula "What Drives Financing Decisions of SMEs? A Survey of German Bank Advisers" Credit and Capital Markets – Kredit und Kapital 55.1, 2022, 67-97. https://doi.org/10.3790/ccm.55.1.67
Goeck, Marco/Walther, Ursula (2022): What Drives Financing Decisions of SMEs? A Survey of German Bank Advisers, in: Credit and Capital Markets – Kredit und Kapital, vol. 55, iss. 1, 67-97, [online] https://doi.org/10.3790/ccm.55.1.67
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What Drives Financing Decisions of SMEs? A Survey of German Bank Advisers

Goeck, Marco | Walther, Ursula

Credit and Capital Markets – Kredit und Kapital, Vol. 55 (2022), Iss. 1 : pp. 67–97

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Duncker & Humblot
DOI
https://doi.org/10.3790/ccm.55.1.67
Language
English
Pages
31
Keywords

Author Details

Marco Goeck, University of Koblenz-Landau.

Prof. Dr. Ursula Walther, Hochschule für Wirtschaft und Recht, Badensche Str. 52, 10825 Berlin.

References

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  142. Martinez, L./Scherger, V./Guercio, M. B. (2019): SMEs capital structure: Trade-off or pecking order theory: a systematic review, Journal of Small Business and Enterprise Development 26(1), 105–132.  Google Scholar
  143. Matias, F./Serrasqueiro, Z. (2017): Are there reliable determinant factors of capital structure decisions? Empirical study of SMEs in different regions of Portugal, Research in International Business and Finance 40(C), 19–33.  Google Scholar
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  145. Modigliani, F./Miller, M. H. (1958): The cost of capital, corporation finance and the theory of investment. The American Economic Review, 261–297.  Google Scholar
  146. Modigliani, F./Miller, M. H. (1965): The cost of capital, corporation finance, and the theory of investment: Reply. The American Economic Review, 524–527.  Google Scholar
  147. Molly, V./Uhlaner, L. M./De Massis, A./Laveren, E. (2019): Family-centered goals, family board representation, and debt financing, Small Business Economics 53(1), 269–286.  Google Scholar
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Abstract

This study explores companies’ financing decisions from a new perspective, those of the bank advisers, who are deeply involved in the decision processes, but are nevertheless outsiders. In our survey, corporate advisers of a large German bank report their perception of clients’ decisions. The survey covers both large companies and many SMEs. It confirms the relevance of company size, but also indicates strong heterogeneity within the SMEs. While some SMEs seem to resemble large companies, others differ noticeably. Our results confirm the relevance of strategy, management experience and decision makers’ personalities, but give little support for capital structure theories. The current change in German companies’ financing behavior towards more market-oriented instruments is clearly visible in the responses. The core motivations seem to be a desire for financial stability and flexibility. To secure this, companies tend to combine traditional bank financing with new instruments.

Table of Contents

Section Title Page Action Price
Marco Goeck / Ursula Walther: What Drives Financing Decisions of SMEs? A Survey of German Bank Advisers 1
Abstract 1
I. Introduction 1
II. Literature Review 4
III. Sample Composition and Questionnaire 6
IV. Factors Influencing Financing Decisions 8
1. Company Characteristics and Leverage 8
2. Financial Policy 9
3. External Factors 1
4. Stakeholders and Management 1
V. Relationships and Dependencies among the Influencing Factors 1
1. Methodology 1
2. Internal Factors, Financing Decisions, and Capital Structure (Theories) 1
3. Financial Policy, Leverage, and Management 2
4. External Environment, Leverage, and Financial Policy 2
VI. Conclusion 2
References 2

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